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Finance Dictionary and Glossary of Investment Terms
Return on Sales
ROS. A measure of a company's profitability, equal to a fiscal year's pre-tax income divided by total sales
Net income as a percentage of sales.Return on sales varies widely by industry. The supermarket business, for example, usually has a low return on sales; the business is heavily dependent on volume. Like the price/cash flow ratio, return on sales can be useful in assessing cyclical companies that sometimes have no earnings during down periods, and firms whose business requires a huge capital investment, and thus lots of depreciation.